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Rouge: Newest low-cost carrier announced

Make room for Rouge, North America's newest low-cost carrier. Rouge was officially announced this afternoon as Air Canada's new "low-cost carrier and leisure group," the National Post of Toronto reports. The

Rouge will focus on holiday routes (route map) to Europe and the Caribbean. The carrier's start-up destinations will be Venice, Edinburgh and Athens as well as tropical locales in Cuba, the Dominican Republic, Jamaica and Costa Rica.

Two of Rouge's inaugural destinations — Venice and Edinburgh — are not currently served by Air Canada.

The Associated Press writes "the discount carrier will begin operations with two Boeing 767-300ER and two Airbus A319 aircraft that will be released from Air Canada's mainline fleet. Planes will be added as Air Canada starts to take delivery of Boeing 787 Dreamliner aircraft in 2014, ramping up to 50 planes."

"With the introduction today of Air Canada Rouge, Air Canada enters today's growing leisure travel market on a truly competitive basis," Ben Smith, Air Canada's chief commercial officer, said at a Tuesday morning press conference, according to The Globe and Mail of Toronto.

"Air Canada Rouge will leverage the strengths of Air Canada's extensive network, operational expertise and frequent-flier reward program in order to offer Canadians great value for their vacation travel," he adds.

The National Post calls the launch of Rouge "a key part of Air Canada's strategy to lower its costs and expand in the years ahead. The low-cost carrier, coupled with the airline's new 787 Dreamliners, is expected to have a dramatic impact on the competitiveness of the airline's fleet."

And, of course, Rouge will live up to its moniker as Air Canada's "low-cost' arm. Wages and benefits will be less for crews at Rouge than for those who work "mainline" Air Canada flights.

Reuters writes "Air Canada plans to hire 150 flight attendants and 50 pilots for Rouge and expects to generate profits by fitting its planes with more seats and paying lower wages."

As an example, the Post says Boeing 767s that fly for Rouge will be configured with roughly 50 more seats than the versions that fly mainline Air Canada flights. Rouge's plans will include standard coach, enhanced coach and "Premium" seats.

The CBC writes "Air Canada says it needs a low-cost carrier to hold on to market share in a field crowded with other vacation-oriented carriers such as Transat, Sunwing and WestJet Airlines."

The concept of a "carrier-within-a-carrier" low-cost airline is not a new one. The idea has been tried numerous times by North American Airlines in recent years, though none of the attempts lasted more than a few years.

Among the failed experiments among U.S. carriers: Song, which flew for Delta from 2003 to 2006; Metrojet, which flew for US Airways from 1998 to 2001; Ted, which flew for United from 2004 to 2009; and Continental Lite, which flew for Continental from 1993 to 1995.

Air Canada itself has had two short-lived attempts at the concept. Its Tango carrier lasted from 2001 until 2003. Air Canada's second "carrier-within-a-carrier" attempt flew in western Canada and was dubbed Zip. It started in 2002 and shut down about two years later.

Most of those failed carrier-in-a-carrier attempts focused on domestic routes — where the legacy carriers that founded them faced competition with then-emergency discount carriers such as Southwest, JetBlue and AirTran. In Canada, Air Canada's units were meant to blunt competition from WestJet and defunct rivals such as Jetsgo.

Still, despite their short-lived existences, some of the failed low-cost sub-brands left a lasting legacy. Many "parent carriers" used their low-cost arms to introduce or tweak now-standard in-flight offerings, such as fee-based meals and snack boxes.

The Tango brand lived on in a small way as Air Canada now brands some of its discount fares as "Tango" fares. Song was popular with its customers for, among other things, a then-state-of-the art passenger entertainment system that included in-seat programmable MP3 selections and satellite TV.

On that note, Air Canada appears keen on replicating that experience for its customers on Rouge. The Post writes Rouge's "planes will also be the first in Air Canada's fleet to use a new wireless in-flight entertainment system, (unnamed) sources say. Jets in Rouge's fleet will stream stored content to personal laptops and other electronic devices."

Unlike Song and the other failed low-cost units, however, Air Canada is no doubt hoping for a longer run than what the previous efforts yielded.